Multinationals under Covid: the reality of power – economy


With the health crisis linked to the Covid-19 pandemic which crosses the world, the alleged return to normalcy will not be without difficulty and is not for tomorrow. The indicators will take us back a few years.

Two thirds of French economic activity and salaried employment are provided in France by around 35,000 companies with more than 50 employees, including medium-sized enterprises (ME), medium-sized industries (MI), medium-sized enterprises (ETI) ) and large companies (GE).

The last third comes from PEs, VSEs and crafts and liberal professions, representing more than 2,500,000 entities. For many, the health crisis may have serious consequences. This could range from the overhaul of the company, to a reconversion, even a cessation of activity. Bankruptcies, bankruptcies, closures, will be accompanied by layoff plans. State aid for the “little ones” will neither be eternal nor sufficient.

Power and performance of “large groups”

The arguments and resources of the “large groups” are oversized despite the constraints of the health, economic and financial crisis, associated with a social risk. Globalization is in the news. It is not their survival that is on the agenda but before their expansion fueled by fierce competition. Capital is the backbone of their international, “all-terrain” struggle.

It is the very meaning of the strategy of these multinationals that allows them to understand the situation. We live and practice this exercise of power on a daily basis, at all levels, in our simple working relationships. Between top-level managers, it involves a multiplicity of alternative contacts between groups and subsidiaries. More or less formal, they are power relations.

They are managed in terms of a balance of power, with shareholders, employees and public authorities, each fearing the other. Power relations cannot be summed up in a more or less muffled permanent struggle akin to the Hundred Years War. When the European Union gets involved under Community rules, this can go as far as blocking transactions, by limiting industrial developments for the benefit of France, under the eyes of a government at the boot of Brussels.

In the event of a problem or crisis, managers, employees and employee unions give concrete expression to this security philosophy of power, communication and authority relations in organizations. Habits are a barrier to discussion. State interference in a crisis firstly strengthens the power of the leaders. How many are then really ready to modify their practices and their behaviors of authority? Few in reality.

The dynamic power, which relates to the person at the head, passes better. It is the reflection of its knowledge, its experience and the quality of its interpersonal relationship, linked to the exported image of the company and of the person who exercises it in the concrete. It is when all the partners get involved that the field of action widens. The performance is then at the end of the road, there is no reason to doubt it.

Power and money

One aspect of power that should not be ignored is that of money. No one is unaware of its importance, especially when it comes to investment, development, economic or technical arrangements. The increase in terms of equity, openness to shareholding are all data that will modify the relationship with power. The leaders are constrained and constrained, themselves dependent on their relationship to money.

The importance of the power of money will depend on the shareholders. It will be all the greater as their influence will be decisive. Multinationals are a good example. The competition is no longer the same once it is faced with the reality of the financial markets.

If purchasing power falls, companies close, multinationals relocate and financial power continues to distribute credit for their projects without counting, with the help of the public authorities in the event of a crisis. Thanks to partial unemployment and the prospects of a stimulus plan from which they can benefit, their profits continue to grow, which does not prevent them from laying off workers in the name of structuring. Most large groups have accounts sheltered from tax measures. They are “official niches” or “tax havens” that no political power can and does not want to control, especially when their head office is abroad. It is the power of money that predominates …

A simple observation is enough to understand

At all levels of the company, in particular for “large groups”, positional power and money remain the only credible references, in the eyes of shareholders, international partners and the State. Crisis or not, these multinationals have apparently saved their results for 2020.

How many “mergers and acquisitions” have taken place in recent years? Three times more than in the previous five years and this always or almost to the detriment of French companies. Buyers welcome this in the name of globalization and in view of the results. Rebuilding an industry is not just about a lifesaving, meaningless and abusive slogan.

The economic and financial press prides itself on announcing exceptional balance sheets in a gloomy and uncertain atmosphere. A large number of French giants have ended up being self-satisfied with the provisional stimulus plan of the State, sufficient profits and rising dividends …

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